Danish Government Proposes Easier Mortgages for First-Time Buyers
The Danish government aims to simplify mortgage access for first-time home buyers amid rising housing costs. Culture Minister Jakob Engel-Schmidt highlighted the challenges faced by young buyers in entering the housing market.
"In recent years, we’ve seen that a great many first-time buyers have been unable to get onto the housing ladder. The number of first-time buyers has fallen by almost 25 percent, and many young people are left pressing their noses against the window, unable to get in."
He emphasized the importance of home ownership as both financially prudent and desirable, expressing the government's goal to increase the number of Danes owning their own homes.
Proposed Mortgage Changes
- Extension of mortgage repayment period from 30 to 40 years.
- Allow mortgages up to 80% of the property's value, unchanged from current policy.
- Remaining costs covered by a bank loan (banklån or boliglån) and a minimum 5% downpayment (egenbetaling).
The government estimates the longer repayment period would reduce monthly mortgage payments by approximately 560 kroner per borrowed million, totaling about 6,700 kroner in annual savings.
"The extended repayment period would lower mortgage repayments by around 6,700 kroner per borrowed million, equivalent to roughly 560 kroner per month."
Summary
These changes are intended to make home ownership more accessible for young Danes struggling with high housing prices.
Author's Summary
The Danish government seeks to ease entry to home ownership for first-time buyers by extending mortgage terms and maintaining favorable loan conditions, aiming to reverse a 25% drop in new buyers.